I've driven a Stage2 STI right after driving my Stage1 WRX at the time, and that was a noticeable improvement. I've also ridden in a 950hp 71 Cuda, and sat in a 1200-1300hp dragster (firing that car up almost made me crap my pants). There comes a point where the level of power isn't even fun on the street because you have to micromanage your car so much you aren't even driving it. The Cuda, with 18" DOT slicks, would spin the tires almost indefinitely at full throttle on the road. We hit water when he was showing me the car and it went sideways at 60 (abandoned empty road, thankfully.)

You are right in that people need to be careful what they wish for. Think you want a certain power level? Drive it first